CHINA MAKES IT THROUGH ANOTHER SPRING FESTIVAL

UNCLAS SECTION 01 OF 03 BEIJING 000406

SENSITIVE
SIPDIS

STATE FOR EEB/TRA/AN FOR KURS, VLIMAYE-DAVIS
STATE EAP/CM FOR SFLATT
STATE PASS USTR FOR ANN MAIN
DEPT OF COMMERCE FOR ALEXIS HAAKENSEN AND EUGENE ALFORD
DEPT OF TRANSPORTATION FOR NPORTER, KGLATZ, PIRVINE, ABEST,
ISAUNDERS, AND BPELLETIER
FAA NATIONAL HQ FOR ROBYN CICERO

E.O. 12958: N/A
TAGS: ELTN EWWT EAIR CN
SUBJECT: CHINA MAKES IT THROUGH ANOTHER SPRING FESTIVAL
TRAVEL RUSH

REF: A. GUANGZHOU 82

B. 09 GUANGZHOU 715

C. 09 BEIJING 150

D. 08 BEIJING 390

E. 08 BEIJING 335


1. (SBU) SUMMARY. Weather permitting, China's travel network
looks set to make it through the strains of yet another
Spring Festival travel rush. China's Ministry of Transport
(MOT) expects 2.54 billion passenger trips to be taken over
the 40 day season centered on the February 14 Spring
Festival. Roads are the dominant mode of travel, but
railways remain an important alternative on long distance
routes. To address migrant workers' concerns about ticket
hoarding and scalping, The Ministry of Railways (MOR) says it
successfully trialed a new real-name ticketing system at 37
stations in south and central China. But even with China's
huge stimulus spending of USD 100 billion on railway
infrastructure, MOR doesn't expect rail capacity to catch up
with peak season demand for another decade. Moreover, poor
migrants are concerned that new, more costly high-speed rail
(HSR) lines might actually reduce their travel options as
cheaper services are eliminated. As China's society becomes
more wealthy, Spring Festival travel patterns also appear to
be changing, with a small but growing number of urban
residents foregoing the annual return home to instead opt for
tourist travel. END SUMMARY.

A BILLION HERE, A BILLION THERE
--------------


2. (SBU) China's Spring Festival travel rush is again in full
swing, as China's workers and migrants return to urban and
coastal areas as the festival season comes to a close. In
what is billed as the "world's largest annual human
migration," China's Ministry of Transport (MOT) estimates a
total of 2.54 billion passenger trips will be recorded during
the 40 day travel season peak in 2010, before and after the
February 14 Spring Festival. On any given day during the
season, more than 60 million Chinese may be on the move.
While great attention is paid to rail and other modes, it is
actually China's road and long distance bus network that
carries the bulk of the traffic, estimated at 2.27 billion
passenger trips, a 7.5 percent increase from last year.
Railways come a distant second, with Ministry of Railways
(MOR) estimating 210 million trips in this year's season (up
9.5 percent). The travel picture is rounded out by water
transport at 32 million passenger trips (up 3.6 percent) and
air transport at 28.9 million passenger trips (up 12.5
percent). Following initial reports of highway closures due
to heavy snow in northern China, the weather seems to have
cooperated for the most part, avoiding the huge delays
experienced in 2008 (refs D and E).

A TALE OF TWO MODES - ROAD VERSUS RAIL
--------------


3. (SBU) Road and rail represent to very different pictures
in China. Long distance bus companies are primarily
privately-owned, and are able to offer increased services and
special routes via China's maturing highway network. But in
rail, with a few exceptions MOR remains both the regulator
and network operator. In spite of China's rush to build new
rail capacity, track cannot be laid overnight, and rail
ticket shortages on key long-haul routes have been a large
source of frustration for China's migrants eager to travel
home during Spring Festival. Claims of petty corruption by
railway officials who sell tickets to scalpers are common.
In 2009, a cell phone video of a Beijing Railway Station
ticket vendor printing stacks of tickets at a closed ticket
window, presumably to be resold on the street, became the
viral video of the season, confirming many migrants' fears
that the system was stacked against them.

REAL-NAME TICKET TRIAL WELCOMED BY MIGRANTS
--------------


4. (SBU) In 2010, MOR announced the trial deployment of a
real-name ticketing system, implemented at 37 stations in
southern and central China, including Guangzhou, a major

BEIJING 00000406 002 OF 003


migrant destination, and Chengdu, a major source of migrants
in inland Sichuan Province. The trial -- taking place from
January 30 to March 30 -- will require that ticket buyers
give the name of passengers who will then be allowed to board
only with proof of identification. MOR hopes that the system
will root out speculative ticket hoarding and ensure that
tickets will be available at stations rather than from
scalpers.


5. (SBU) According to survey team from the National
Statistics Bureau in Guangzhou, 94 percent of migrants
supported the real-name ticketing system, but 17 percent
feared the new system would complicate boarding at stations.
Implementation was not without issues (ref A). One press
photo showed the staff of one trial station helping late
passengers board through the train windows, resulting in
disciplinary action for the station management and workers.
But MOR spokesman Wang Yung commented that on February 14
that Guangzhou-area train stations had successfully passed
the initial 15-day implementation of the new system.
Vice-Minister of Railways Hu Yadong proudly proclaimed, "It
has effectively suppressed ticketing scalpers during the
Spring Festival Rush."

BUT RAIL CAPACITY NEEDS A DECADE TO CATCH UP
--------------


6. (SBU) In spite of the new ticketing system and a near
doubling of railway investment in 2009, train tickets still
far from meet demand during the peak season. MOR's
investment was boosted even further to USD 100 billion in
2010, and officials expect this to be maintained for several
years as stimulus funds are disbursed for high-speed rail
(HSR) projects and freight rail improvements. (Comment:
Spending stimulus money on railways, especially high-speed
rail, has become an effective way for the Chinese government
to prop up badly needed domestic demand, maintain employment
and boost the domestic economy to compensate for the fall in
exports. End Comment.) However, it will still take some
years for current projects to begin service. A senior MOR
official stated that railway infrastructure would finally
meet the demands of the peak travel season in 2020.


7. (SBU) Yet not all are pleased with the changes. With the
opening of the new Guangzhou-Wuhan line on December 26, many
migrants complained about the high cost of tickets on the new
line and about the decision to reduce the number of more
affordable, slower trains (ref B). Tickets on this new line
between central and southern China cost RMB 490 (USD 72.00)
while the regular sleeping berth ticket cost only RMB 200
(USD 29.00). The bulk of Spring Festival passengers are
migrant workers labors from rural areas and students who are
very price sensitive. Some transportation analysts have even
suggested that cities which benefit from the new lines should
subsidize the HSR tickets for migrants during the Spring
Festival rush.

HELL'S ANGELS - CHINA STYLE
--------------


8. (SBU) Unable to wait for China's rail build out, and
unwilling to pay more for tickets, Chinese media reported
that some migrants are choosing to travel home via motorbike,
taking advantage of China's improving road network.
Motorbike travel is much cheaper, as little as RMB 100 (USD
14.50),a fraction of the cost of using commercial bus or
rail services. It was estimated that nearly 100,000 migrants
left Guangdong Province via motorbike this Spring Festival,
prompting local officials to establish dedicated rest areas
and free tea, to enable drivers and passengers to rest and
hopefully reduce accidents.


9. (SBU) Demographic changes are also likely to impact the
future of Spring Festival Rush, as migrants begin to identify
more closely with their new urban homes. Chinese media
carried anecdotal reports of young workers skipping the trip
home, at times to avoid on the costly traditional gift-giving
to young relatives; other times preferring to take pleasure
trips with their urban friends instead of visiting their
hometown.

BEIJING 00000406 003 OF 003


HUNTSMAN